Thursday, May 19, 2022

Global Market Square

By on March 8, 2021

The U.S. stock market had quite a trading session Monday but ultimately lost momentum mid-afternoon to close with mixed results. The Dow gained more than 310 points; the lift came in part due to the continued stock rotation and the rising performance of some stocks within the Dow Jones Industrial Average; one of them was the Home Depot (HD), which rose $7.24, or 2.86%, to close at $260.76, while the Walt Disney Co. (DIS) climbed $12.81, or 6.74%, to close at $202.80.

Another aspect not fully priced in the markets is the optimism over the $1.9 trillion “bazooka” stimulus package having cleared the Senate and is now in the House, which is expected to vote on the upper chamber’s amendments Tuesday.

The Stimulus bill includes $1,400 checks to citizens, $350 billion in aid for state and municipalities, and an extension of employment benefits.

As we register last week’s volatility, mixed with Monday’s market close, we affirm our view that investors are carrying out a classic stock rotation.  Savvy investors are projecting that the pandemic will be under control sooner rather than later. They have begun to circle the wagons to acquire those stocks least favored during the pandemic at low prices and selling those more favored during the pandemic, and this is part of the reason why the tech-heavy Nasdaq Composite has a return so far in 2021 of  minus-2.17%. 

In our view, segment direction is bound to continue to rotate as the economy and the year marches on, supporting a comprehensive and energetic rebalancing strategy of most well-diversified portfolios.

Wall Street summary for March 8, 2021:

  • The Dow Jones Industrial Average closed at 31,802.44, up 306.14 points, or 0.97%.
  • The Standard & Poor’s 500 closed at 3,821.35, down 20.59 points, or 0.54%.
  • The Nasdaq Composite Index closed at 12,609.16, down 310.99 points, or 2.41%.
  • The Birling Capital Puerto Rico Stock Index closed at 2,350.74, up 54.78 points, or 2.39%.
  • The U.S. Treasury 10-year note closed at 1.59%
  • The U.S. Treasury 2-year note closed at 0.17%.

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